Technology companies on AIM trend report

Technology companies on
AIM trend report
Enterprise values of software companies prove resilient
in the second half of 2015
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Technology companies on AIM trend report
Enterprise values of software companies prove resilient in the second half of 2015
The infographic overleaf summarises our detailed research into the activities of technology companies
trading on the Alternative Investment Market (AIM) in the six months ended 31 December 2015.
Over £200m has been raised in the six month period – £35.5m from four IPOs and £174m relating to
secondary fundraisings from 30 companies. This compares with over £700m raised in the first half of
2015 – a sharp decline, although the first half was skewed by the £450m raised by Optimal Payments.
The average enterprise value of a technology company on AIM has decreased in the six month period
– but, given the macroeconomic conditions at the turn of the year, it is surprising that values have only
decreased by 0.1% compared with 30 June 2015. This resilience has been largely supported by the
software sector, with enterprise values increasing by 2% compared with decreases in hardware (12%)
and telecoms (9%).
Dougie Hunter, Associate Director at Moore Stephens, comments “the gap in valuation multiples of
software companies compared to hardware companies on AIM has widened again in the second half of
2015. It closed to within 5% at 30 June 2015, but the difference now stands at closer to 40%, although
given the small population of hardware companies on AIM, compared to software companies, it can
easily be skewed by the performance of one or two companies such as Telit Communications and Vislink
which have both seen large falls in market value in the period.”
1.91 1.70
13
13
12.4
9.4
A decrease in overall revenue
valuation multiples from
1.91 to 1.70
Software companies EV/EBITDA
multiples have remained at 13
while hardware companies have
decreased from 12.4 to 9.4
177
173
A decrease in the number of
technology companies on AIM
from 177 to 173
Technology companies on AIM – July to December 2015
IPOs
Secondary
Fundraisings
30
4
£174m
Raised in six months
ended 31 December 2015
£35.5m
Raised in six months
ended 31 December 2015
Enterprise
Values (EV)
£60.9m*
EV/Revenue
Multiples
1.70*
0.1%
1.93x
Decrease in six months
ended 31 December 2015
£28m
12%
£21m
2%
9%
1.70x
Hardware
Software
£14m
Telecoms
£13m
*Average
EV/EBITDA
Multiples
11.69*
1.6%
Decrease in six months
ended 31 December 2015
13.1
Software
1.72x
12.4
Hardware
9.4
1.27x
10.0
Electronics
9.0
Support
services
9.6
*Median
8.6
AIM Tech
Companies
91
Software
15
Hardware
13
Telecoms
18
Electronics
13.0
24
Support
Services
12
Other
10.1
Telecoms
11.7
*Median – based on latest available
financials to 30 June 2015 and 31
December 2015 and companies with
positive EBITDA.
Source: London Stock Exchange and Moore Stephens analysis. 173 technology companies trading on AIM at 31 December 2015 (excludes biotech and investment companies) as classified by Moore Stephens.
Key transaction
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Invacom
Technology
Moore Stephens Corporate Finance advised leading technology company, Global Invacom Group Limited,
on the first ever dual listing on the Singapore Stock Exchange (SGX) and the London AIM Market.
This ground-breaking secondary listing has been widely reported in the business and financial press
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technology sector.
Moore Stephens Corporate Finance, led by Marty Lau and Mark Ayres, worked closely with the client and
acted as Reporting Accountant to the listing.
“We were pleased to work with Moore Stephens on the successful listing on the AIM market, the
first dual listing of its kind. This listing will enable Global Invacom to access new sources of capital
to help meet its international growth strategy, broaden its shareholder base, and enhance value
for its current Singapore-based shareholders and the Moore Stephens team was an important part
of the process to achieve this end goal.”
Matt Garner, CFO, Global Invacom
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